In simple words, you use internet on your mobile device either by Wi-Fi or cellular network. If you use cellular data, mobile device shows it as a 3G, 4G or LTE sign on the top of screen. Previously it was ‘E’ sign for old technology that was slow. In other words cellular data is used for data communication in cellular networks. You can turn it on or off from settings app. If you turn it off, it will not affect the ability to make or receive phone calls or to use Wi-Fi networks for Internet connectivity. If Wi-Fi is available for your device, its best to turn cellular data off from device because mobile networks charge extra for cellular data (internet and roaming). Even if you have got a package (month based), cellular data can cost you more.
You can safely switch on or off cellular data from settings app.
From your iOS device, tap on settings > Cellular Data
Toggle cellular data from there into on of off. If it is set to on, it will show you data usage, current period roaming and apps that are using cellular data.
For older iOS tap on settings > iTunes & App Stores > Use Cellular Data
iOS 7 allows us to control apps selectively to use cellular data or not. Under ‘Use Cellular Data For’, disable cellular data for selective apps. Apps that you disable from there will not use cellular data and those will connect to the internet only by using Wi-Fi if available.
If Wi-Fi is available, apps will use Wi-Fi for internet by default. If Wi-Fi is not available, only those apps allowed to use cellular data will use cellular network. We switch off cellular data because it can cost a lot, even without you knowing it. Cellular data plans/packages are not affordable for everybody. Turning off cellular data will also increase battery time because device will not search for the cellular network for internet communication.
Not only the apps, but few background services also use internet and if cellular data is on, those services will use that in absence of Wi-Fi. These services include but may not be limited to photo streaming, push notifications, automatic updating for apps and push emails. Turn off push for everything and use fetch instead of push.
Learn how to turn off notifications and such services here.